Vioxx case loss sets back Slater & Gordon

The full Federal Court has ruled a Slater & Gordon client failed to prove the anti-arthritis drug Vioxx was responsible for his heart attack eight years ago, a decision that could cost the listed law firm $9.8 million.

Slater & Gordon
has been conducting the case for former navy medic Graeme Peterson as part of a class action against international pharmaceutical giant Merck and its Australian subsidiary.

Mr Peterson suffered a heart attack in 2003 after using the drug and is the lead plaintiff in the case. The law firm is also representing 400 other Vioxx users. In March last year Mr Peterson won a negligence and Trade Practices Act claim against Merck Sharpe & Dohme Australia, and was awarded $287,000.

The damage suffered by the 400 members in the class action was not determined, but if each was awarded a similar amount, it would cost the US company about $114 million.

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They also set aside the original decision and dismissed a cross claim by Mr Peterson.

The court accepted part of the appeal in relation to the 400 other participants in the class action.

The judges said Vioxx was defective but Mr Peterson had “failed at the first hurdle" to show it caused his heart attack. They also said this did not rule out Slater & Gordon’s other clients from succeeding in the lawsuit.

In a statement to the Australian Securities Exchange yesterday, the law firm said Mr Peterson could attempt a High Court appeal.

“The court’s decision does not foreclose all rights available to class members other than Mr Peterson," the law firm said. “The parties may also decide to work towards a negotiated settlement."

The failure of the class action could cost the firm as much as $9.8 million which, it said, was less than 4.5 per cent of its total work in progress and paid disbursement balances at the end of the last financial year.

The court has yet to award costs but it is unlikely these will be sheeted home to Slater.

Merck said it was “satisfied with this outcome, and is in the process of reviewing the full judgment".

Vioxx was withdrawn from sale in 2004. In 2007, Merck agreed to pay $US4.85 billion to compensate Vioxx users in the US.